St Luke's Hospital builders have contracted dropped

The hospital is now due to open in early 2012

An NHS trust in Leicestershire has said a contract to build part of a new hospital has been terminated.

NHS Leicestershire County and Rutland had been using construction firm Modcon UK Ltd for the Day Case Unit at St Luke's Hospital in Market Harborough.

Work had faced a number of delays and health bosses issued an ultimatum last month.

The trust said it was now taking legal advice over the possibility of recouping costs from Modcon.

Construction of the Day Case Unit was based around a series of prefabricated units imported from the Middle East.

'Extremely disappointed'

These were delayed at docks after apparently suffering damage.

After they arrived in May, other construction work became intermittent, then halted.

The trust demanded Modcon fulfil its contract and gave the company a two-week deadline to respond.

It said this had not happened and as a result a legal notice detailing the termination of contract has been delivered by hand to Modcon UK Ltd's offices.

Sue Bishop, NHS Leicestershire County and Rutland's director of finance, said: "This was not a decision taken lightly and unfortunately it will mean further delays to a project which has been beset by several difficulties over the last year.

"We are extremely disappointed that it has come to this, but we could not allow the contract to continue when the promised work and contractual obligations were not being fulfilled by Modcon UK Ltd."

Bosses confirmed they would be looking for a new contractor immediately but the hospital would now not open until early 2012.

Modcon has not commented.